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The MCC Is Listening to (or Reflecting) What People Want

Does the US government care about its repeated commitments to focus assistance on country-led priorities? Based on public attitude surveys in Africa and Latin America over the last decade, the answer seems to be ‘not really’. Very little US assistance has targeted what ordinary people cite as the top problems affecting their countries. But, it’s not all doom and gloom. There are pockets of alignment, where US development agencies empower partner countries to take the lead. Both in terms of identifying big picture priorities and then implementing projects designed to address them. The Millennium Challenge Corporation is one of them.

The MCC is the only US development agency that explicitly requires that partner country governments propose their own assistance programs. The basic premise is that these governments – with input from businesses, NGOs, and ordinary citizens – will have the best idea of what would boost economic growth and poverty reduction in their country. Many of us who have parachuted into a country to provide “indispensable” advice will attest to this principle. At least, in hushed tones in a very private place. Local officials usually already have the answer. With multi-year money and no sectoral earmarks, the MCC empowers officials to pursue these answers.

Of course, the MCC doesn’t blindly approve what countries put forward. It works closely with them to refine their proposals, making sure the resulting program meets certain standards for cost effectiveness, demonstrates solid potential to increase income levels, and are likely to be sustainable. But, the partner government is clearly in the driver’s seat.

In Africa, this has led to big investments in infrastructure and agricultural market systems (which I code as jobs/income in my CGD working paper). In Latin America, it has typically meant focusing on rural livelihoods, transportation infrastructure, and property rights – which are packaged together to raise income levels amongst target populations. With few exceptions, these two thematic issues – jobs/income and infrastructure – were cited as top three national problems when the MCC compacts were being developed. The most notable outliers are that people in El Salvador, Honduras, and Nicaragua have placed a far smaller emphasis on infrastructure over time. However, employment and income-related concerns were at, or very near, the top of their most pressing concerns.

The MCC has also given a big boost to broader US alignment trends. The share of total US assistance aligned with people’s top concerns has been dramatically higher during MCC compact commitment years than during non-compact years or in MCC-ineligible countries (see figure below). Moreover, of the ten African countries with the highest alignment share over time, seven have received significant MCC assistance. All of this suggests that when US assistance has been closely aligned with people’s priorities, the MCC has usually been the driving force behind it.

Over the last few weeks, several people have raised interesting questions about whether there is something more to the MCC’s strong alignment trends. Basically whether democratically-elected governments, if given the chance, will naturally channel project assistance towards what their constituents raise as the most pressing national problems? Whether or not there is a traditional consultation process for citizens and businesses to share their views. It would be an interesting question to test with further analysis. If you have thoughts on this, or anything else related to the MCC’s approach to aligning its programs, then we would love to hear them.

And keep an eye out for the next piece in my Is Anyone Listening series – the African Development Bank.